Renovating a home before selling it has become an increasingly popular strategy among homeowners looking to boost their property’s value. According to a recent study by Keller Williams Spain and Andorra, the right renovations can increase a home’s final sale price by up to 15% and reduce the time needed to complete a sale by 40%. The research, which examined over 5,000 residential property sales managed by their teams over the past year, highlights that specific and well-planned improvements can significantly transform a property’s price and sales timeline.
The report emphasizes that modest, visible, and market-oriented renovations tend to be beneficial, avoiding major investments that are difficult to recoup. Leonardo Cromstedt, president of Keller Williams Spain and Andorra, states, “The key is distinguishing between renovations that help sell better and those that only add to the expense without delivering a real return.” Renovated homes have the ability to attract buyers interested in immediacy and willing to pay more for a move-in ready home.
Low and medium-cost renovations usually offer the best outcomes, according to the study. Improvements like painting walls in neutral tones, updating lighting, and making tweaks in the kitchen and bathroom can create a sense of care and modernity, generating an estimated return of between 70% and 200%. For an average 80 square meter home in Madrid, this could mean a value increase of up to 30,000 euros.
However, experts caution that investing in high-end materials or excessive customizations does not always lead to a proportional increase in sale price and can even extend the time on market. Luxury elements, such as marble floors or top-of-the-line appliances, can significantly increase costs without ensuring an adequate return. In fact, many buyers prefer to purchase homes without these modifications to implement their own projects.
Taxation is another critical factor to consider when renovating. Homeowners can include the cost of certain justified renovations in the property’s purchase price, reducing the capital gain on which Income Tax is calculated. Additionally, there are tax incentives for renovations that improve energy efficiency, allowing for considerable savings.
Furthermore, the current regulations allow for a reduced VAT rate of 10% on certain renovations for homes older than two years, provided certain criteria are met. Keller Williams underscores the importance of making renovations with judgment and within a reasonable budget, tailored to the expectations of the current market. In some instances, selling the property without updates may be more efficient, making a professional analysis before selling an essential option to maximize the outcome of any sale.